WRI Insights

Expectations are running high as the Board of the Green Climate Fund prepares for its fifth meeting in Paris this week. The GCF must make progress towards five key issues at next week’s meeting in Paris.

The world continues to see [the “costs” of fossil fuel use](/news/2013/09/new-report-connects-2012-extreme-weather-events-human-caused-climate-change) in the form of climate change impacts like heat waves, floods, and [extreme weather](/news/2013/07/timeline-look-extreme-weather-and-climate-events-2013). While these costs are often overlooked in traditional economic modeling, [a new book](http://www.imfbookstore.org/ProdDetails.asp?ID=ESRLIEA) from the International Monetary Fund (IMF) quantifies them.

An old Wall Street adage says “the market hates uncertainty.” Well, businesses received an unambiguous message last week with the [latest](http://www.ipcc.ch/news_and_events/docs/ar5/press_release_ar5_wgi_en.pdf) Intergovernmental Panel on Climate Change report.

While working on tracking adaptation finance for our [Adaptation Finance Accountability Initiative](/project/vulnerability-and-adaptation/finance) project, we often get the question “[What is adaptation finance](/publication/weathering-the-storm)?” or “What counts as adaptation finance?” To our embarrassment, we still [don’t](/publication/monitoring-receipt-of-international-climate-finance-by-developing-countries) have a clear answer to either question, other than “Well… finance that funds efforts to adapt to the impacts of climate change qualifies as adaptation finance.” We aren’t the only ones who struggle to define the very issue on which we work. Even some of the definitions that the [Organisation for Economic Cooperation and Development](http://www.oecd.org/dac/environment-development/rioconventions.htm) (OECD) and [multilateral development banks](http://climatechange.worldbank.org/sites/default/files/Joint%20MDB%20Report%20on%20Adaptation%20Finance%202011.pdf) are developing do not provide a complete answer to the question of what types of investment are considered to be adaptation finance. We decided to do some soul-searching on this subject. While it’s still too complicated to provide a cut-and-dry definition of adaptation finance, we identified three common traits surrounding the issue: Adaptation finance is context-specific, dynamic, and not just about finance.

The Wayuu people in northern Colombia depend on shrubland for grazing their livestock. These herds serve as the Wayuus’ main source of income and food, and this is partly why they depend so heavily on the existence and condition of shrubland ecosystems. But livestock are also used to pay dowries or make amends, playing a major role in facilitating social interactions between families and clans. If an oil and gas project adversely affects the shrubland ecosystem, it could impact not only the Wayuus’ income and protein intake, but the social bonds that hold these communities together. Most planners fail to account for the multiple—and sometimes underappreciated—benefits that people derive from their environment, a concept known as ecosystem services. While [new Environmental and Social Impact Assessment (ESIA) standards](http://www.wri.org/blog/2013/06/demystifying-role-ecosystem-services-impact-assessments) require impact practitioners to account for ecosystem services when evaluating a proposed project’s potential impacts, many lack a methodological approach that would enable them to properly integrate social and environmental issues. Until now, that is. WRI’s new guide, *[Weaving Ecosystem Services in Impact Assessment: A Step-by-Step Method](http://www.wri.org/publication/weaving-ecosystem-services-into-impact-assessment)*, aims to highlight the interdependence of development projects, people, and the environment. The guide helps impact practitioners and project developers evaluate the social implications of impacts on ecosystems brought by highways, dams, oil and gas wells, and other such projects. By systematically incorporating a consideration of ecosystem services into environmental and social impact assessments, planners can mitigate negative impacts on ecosystem services while also achieving project objectives.

Water risks such as floods, scarcity and pollution are increasingly chipping into corporate bottom lines. The financial sector is taking notice--and taking action. Calvert Investments [asked Hanes Brands](http://www.theguardian.com/sustainable-business/shareholder-pressure-companies-water-risk) to evaluate its losses from cotton-supply shortages due to the 2011 US drought, determining that the company lost $5.2 billion.

It’s not every day that several former Heads of State, the leader of the global trade union movement, an organizer of urban slum dwellers, a business leader, and a number of other leaders and advocates all come together on the same page.

Yesterday, the Obama Administration released the [sixth U.S. Climate Action Report (CAR6)](http://www.state.gov/e/oes/climate/ccreport2014/index.htm) for public review, to be submitted to the United Nations Framework Convention on Climate Change (UNFCCC) in January 2014. The report, which all developed countries are required to complete, outlines U.S. historical and future greenhouse gas (GHG) emissions, actions the country is taking to address climate change, and its vulnerability to climate change impacts. This report follows the President’s recently announced Climate Action Plan, which, as the [CAR6 report shows](http://www.state.gov/documents/organization/214979.pdf), could enable the United States to meet its international commitment of reducing emissions 17 percent below 2005 levels by 2020—if it acts ambitiously, that is. However, as the report acknowledges, U.S. government agencies will need to propose new rules and take other steps to implement the Climate Action Plan. CAR6 factors in this uncertainty and shows that implementation of the Climate Action Plan will result in reductions in the range of 14 to 20 percent below 2005 levels by 2020 (not taking into account land use). As WRI found in our report, *[Can The U.S. Get There From Here?](/can-us-get-there-here)*, the Obama Administration can achieve a 17 percent emissions-reduction target only by taking ambitious “go-getter” action. Now is a good time to reflect on what the United States has done over the past four years and what still needs to happen across the major emissions sources in order meet the national emissions-reduction goal and curb the effects of climate change.

*EDITOR'S NOTE 11/18/13: After this blog post was published, the IPCC [updated](http://www.climate2013.org/images/uploads/WGI_AR5_SPM_errata_20131111.pdf) its Summary for Policymakers. The figures in this blog post have been updated to reflect new information.* The [Intergovernmental Panel on Climate Change’s](http://www.ipcc.ch/) (IPCC) Fifth Assessment Report (AR5) has delivered an overwhelming consensus that climate change impacts are accelerating, fueled by human-caused emissions. **We may have just about 30 years left until the world’s carbon budget is spent if we want a likely chance of limiting warming to 2 degrees C.** Breaching this limit would put the world at increased risk of forest fires, coral bleaching, higher sea level rise, and other dangerous impacts. #### When Will Our Carbon Budget Run Out? #### The international community has adopted a goal for global warming [not to rise above 2°C](http://unfccc.int/resource/docs/2011/cop17/eng/09a01.pdf) compared to pre-industrial temperatures. Scientists have devoted considerable effort to understanding what magnitude of emissions reductions are necessary to limit warming to this level, as the world faces increasingly dangerous climate change impacts with every degree of warming (see Box 1). IPCC AR5 summarizes the scientific literature and estimates that cumulative carbon dioxide emissions related to human activities need to be limited to 1 trillion tonnes C (1000 PgC) since the beginning of the industrial revolution if we are to have a likely chance of limiting warming to 2°C. This is “our carbon budget” – the same concept as a checking account. When we’ve spent it all, there’s no more money (and the planet’s overdraft fees will be much more significant than a bank’s small charges for bounced checks).[^1]